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Swedish GDP grows by 6.4 percent

Published: 27 May 2011 10:10 GMT+02:00
Updated: 27 May 2011 10:10 GMT+02:00

The Swedish economy continues to expand, growing by 6.4 percent in the first quarter of 2011, according to new statistics, although GDP growth has slowed slightly.

The new figures, published on Friday by Statistics Sweden (SCB), also showed that Sweden's seasonally adjusted GDP grew by 0.8 percent between the fourth quarter of 2010 and the first three months of 2011.

In addition, household consumption and government spending both increased 2.1 percent, which gross fixed capital formation increased by 8.7 percent.

Exports were up 15 percent and imports increased 13 percent, while industrial production rose by 9.2 percent.

First quarter growth was slightly below the 6.5 percent forecast by a Reuters poll of analysts.

"A little weaker than the 6.5 percent we had expected. Household consumption and net exports were especially disappointing," Swedbank analyst Knut Hallberg told the TT news agency.

"It's clear that households are having a tough time with high fuel prices and mortgage costs."

At the same time, SCB adjusted Sweden's overall GDP growth for 2010 upward from 5.5 percent to 5.7 percent.

Despite the strong figures, first quarter GDP growth has tapered off somewhat from the record growth recorded in the fourth quarter of 2010.

Preliminary statistics put GDP growth for the last three months of 2010 at 7.3 percent, but the figures were later adjusted upward to 7.7 percent – the highest year-on-year quarterly growth rate ever recorded in Sweden.

"The Swedish economy is developing well, even if we're slowing down a bit compared to 2010. And it's in line with most forecasts," Torbjörn Isaksson, an economist with Nordea bank, told TT.

"It's investment and consumption which are a little lower than we expected."

Isaksson added that exports are stronger than forecasted and that inventory effects were also larger than expected

"Changes in inventories account for a whole 2.5 percentage points of growth. There is therefore a need to reduce inventories in parts of the retail sector later this year," he said.

Swedbank's Hallberg emphasised that Sweden's economy is performing well compared to a number of other countries.

But it's clear that growth is slowing and it heading toward more normal levels.

"By the turn of the year I think that we'll have a growth rate of 2.5 percent," he said.

TT/The Local/dl (news@thelocal.se)

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Your comments about this article

11:41 May 27, 2011 by Buckshot
OK, let´s how long it takes before the haters and loosers arrives.

I admit that Sweden is not perfect, but it´s better than most other countries.
12:06 May 27, 2011 by Kevin Harris
Now I'm all confused. The governing party has balanced the books, and set the economy up for steady growth, and yet, if we are to believe pollsters, Swedes prefer the opposition. Is it just me, or does this all seem a bit wierd?
12:34 May 27, 2011 by Buckshot
It´s because the Socialdemocrats has just gotten a new leader.

When the novelty factor disappears, they will loose popularity.
12:44 May 27, 2011 by miss79
if its strong economy, why we gain more unempolyment year by year?why everything start to become expensive?weirddd
13:03 May 27, 2011 by Mib
@miss79....unemployment is going down in general...however under 25s and immigrant unemployment has not. That is a political issue that needs to be addresses NOW!

Things are becoming more expensive as emerging economies such as India and China are using more resources, which pushes up commodity prices ie. they are cinsuming more dairy products, oil, copper, steel etc and that means we all pay more for these.

As Borg pointed ut, Banks are taking the P### by maintaining too high margins on their loans to consuenrs and businesses.....+ interest rates have gone up and that means we all pay more. Simples!
13:30 May 27, 2011 by gplusa
A 3% mortgage is expensive ? Since when ? Great news that India and China are using more steel and copper. Where do you think they buy it from ?
04:54 May 29, 2011 by jackx123
probably large commodity exporters like Oz, brazil and russia!!!!
17:53 May 29, 2011 by planet.sweden
Kevin Harris@

"Now I'm all confused. The governing party has balanced the books, and set the economy up for steady growth, and yet, if we are to believe pollsters, Swedes prefer the opposition. Is it just me, or does this all seem a bit wierd?"

The next election is set to be pretty disjointed. Yes the government has run a good economy, but there's more to society than that, and at the same time Sweden is becoming less equal, more greedy and corrupt, and flash cash vulgarity is everywhere.

On top of this Reinfeldt has settled upon a truly Brownite short term artficial stimulus fix by imported record numbers of immigrants to give GDP a boost .

The history of other countries (eg Spain) shows that invaraibly ends in social unrest, bantruptcy and tears.

All in all think of Thatcher's Britain with mass migration thrown in (something the Lady never allowed) and you may understand why so many Swedes are unsettled.
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